The first is, may I connect the ground from the chip to one ground and the ground from the switch back to the same ground. Basically having both wires on the same ground, can I do that and not have any issues?

The second one is about the switch. There are five pins total, which ones do I cut off and which ones do I keep, the tutorial is not quite clear enough for me.

Lets use this below as an example:

: :

There are two on the left, two on the right, and one on top in the middle. Which ones do i use?

I sold you the kit. I think I replied to you earlier. You use either the 2 on the left OR the two on the right. Do not use one of each and disregard the long pin.

And as far as the ground goes, anybody who buys my kits and installs this should not run into a problem using the same ground point on the NEWER sixaxis and Dualshock 3 controllers. The tutorial for the older controllers gives you 2 grounds, which were used merely for convenience sake.